Nektar’s Q2 Earnings Lag Estimates, Revenues Top

Nektar Therapeutics NKTR incurred a loss per share of 25 cents in the second quarter of 2024, which was wider than the Zacks Consensus Estimate of a loss of 21 cents.

Excluding the impact of non-cash restructuring and impairment charges, the company reported an adjusted loss of 19 cents per share in the second quarter of 2024 compared with an adjusted loss of 18 cents per share in the year-ago quarter.

Total revenues were $23.5 million in the second quarter, up 14.6% year over year. Revenues beat the Zacks Consensus Estimate of $17 million.

Quarter in Detail

In the second quarter, product sales increased around 42.5% year over year to $6.6 million. Product sales beat our model estimate of $4.6 million.

Non-cash royalty revenues were $16.8 million, up around 6.1% from the year-ago quarter. Non-cash royalty revenues beat our model estimate of $14.8 million.

Research and development (R&D) expenses were $29.7 million, almost flat year over year.

General and administrative (G&A) expenses increased 14.5% year over year to $20.5 million.

Nektar’s stock was down 4.9% in after-hours trading on Aug 8 in response to the mixed results.

Shares of Nektar have skyrocketed 114.1% year to date against the industry’s decline of 5.2%.

Image Source: Zacks Investment Research

Pipeline Updates

Nektar’s lead pipeline candidate is rezpegaldesleukin (rezpeg), which is being developed as a self-administered injection for several autoimmune and inflammatory diseases. NKTR regained full rights to rezpeg from Eli Lily LLY in April 2023 and took charge of its clinical development.

Rezpeg was earlier developed in collaboration with Lilly for several autoimmune indications.

Rezpeg is now a wholly owned asset of Nektar and the company owes no royalty payments to LLY.

A phase IIb study is ongoing in patients with moderate-to-severe atopic dermatitis, also called eczema. Initial data from this study is expected in the first half of 2025.

Another phase IIb study is investigating rezpeg for treating patients with severe-to-very severe alopecia areata in March 2024. Top-line data from this study is expected in mid-2025.

Zacks Rank & Stocks to Consider

Nektar currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the biotech sector are Exact Sciences Corporation and Entrada Therapeutics, Inc. TRDA, each sporting a Zacks Rank #1 (Strong Buy) at present.

In the past 60 days, estimates for Exact Sciences’ 2024 loss per share have narrowed from $1.09 to $1.00. Loss per share estimates for 2025 have narrowed from 21 cents to 8 cents. Year to date, shares of EXAS have decreased 22.6%.

EXAS’ earnings beat estimates in three of the trailing four quarters while meeting the same on the remaining occasion, the average surprise being 56.19%.

In the past 60 days, estimates for Entrada Therapeutics’ 2024 loss per share have narrowed from 14 cents to 13 cents. Loss per share estimates for 2025 have narrowed from $3.44 to $3.21. Year to date, shares of TRDA have lost 4.3%.

TRDA’s earnings beat estimates in two of the trailing four quarters while meeting the same on the remaining two occasions, the average surprise being 42.18%.

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